“We benefited from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-over-year growth in loans and deposits in Citicorp, and a more favorable credit environment,” CEO Michael Corbat said in a statement. “However, the environment remains challenging and we are sure to be tested as we go through the year.”

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Citi’s results were also boosted by using approximately $700 million of deferred tax assets.

Likewise, Citi benefited from less drag at Citi Holdings, the segment of the bank that houses its legacy assets now considered noncore. Excluding credit valuation changes, revenue at Citi Holdings jumped 15% year-over-year to $910 million even as total assets tumbled 29% to $149 billion. This division now represents just 8% of total Citi assets.

Underscoring improving credit conditions, Citi said its allowance for loan losses dropped to $23.7 billion at the end of the first quarter, compared with $29.0 billion at the end of the year-earlier period. Loan loss reserve releases dropped 44% to $652 million.

Shares of New York-based Citi climbed 2.05% to $45.70 ahead of Monday’s opening bell, putting them on track to extend their 2013 rally of 13%.